Mindsets

[nana8]

Hi everyone-
We too were woried about what ohers would think of our decision to walk away, espically our older children (5 of the 6 are over 20). We, as parents, did not want to be setting a bad examplefor them. We called them all over and had a family meeting about it. We usally do not disclose the "nitty gritty" of our finances with them but in this instance it seemed pudent to do so. In the end we all agreed that this is unfortunatly the only choice we have. We cannot let ourselves go down with this sinking ship. We did not want them to think that we just gave up, we showed them how long and hard we have fought this losing battle. Now they understand.

[ProfessorShays]

A couple of key quotes come to mind. One is that "time is money." Never is that more evident in a downward market, where the decision relating to expending money towards maintenance of the status quo (by continuing to make house payments where the home is hopelessly underwater), costs real dollars and can be particularly injurious where people borrow from their retirement nest egg.

The other quote relates to "paralysis by analysis." I read a story a while back that the most successful CEOs make correct decisions approximately 52% of the time. Their success isn't based upon a finding that they are always right when making decisions. Success is based upon the ability to make a decision and live with the consequences. A long time ago, the president of a successful savings and loan association give me a bit of advice. Your first loss is your cheapest loss. What he was suggesting to me was there is merit in "cutting your losses" as quickly as possible.

Take care,

Daniel

[RimToRimHiker]

There's only one question to ask yourself... are you doing what is morally right for you and your family? The heck with everyone else. Sounds to me like you might need some new friends. True friends would stand behind whatever decision you make and do so without making any moral judgments.

Walking away is not been an easy decision for any of us to make. Those of us choosing to walk are doing so because we know in our hearts it is the best thing to do for our family's financial well being.

Hang in there and know that you have lots of friends right here who understand and support you.

[Enough Already]

I agree with Slammy!

One of my first questions, when we considered this option was "what will the neighbors think, what will our friends think"? It's just really none of their business. There are a few very close friends who we will tell, but very few.

We've just now skipped our 2nd mortgage payment. Our house is $80K+ underwater. By skipping the payments, we've saved up $5000 in 2 months. We haven't been able to save anything for the past 4 years. It feels pretty good to know we're able to save up some money again.

You are the only one who has to live with your decisions, so it doesn't matter what anyone thinks.

[ultimate4799]

amen, Enough already totally agreed!

[Jumbo101]

Talked to some people today about being underwater and so on, There response was you just **** it up and pay. I told them I can still make the payment, I then asked them how do I refi a house in 5 years that's 250K under. No one had an answer.

[medic]

MarkMc2000,

Yes! Adjust to the new reality. Well put.

My husband became disabled AFTER we bought our house. The simple things in life: making dinner at home, just being together. Both our health is compromised. Yet, we are so happy right now. We spend soooo much more time with our 4 kids. We have found lots of free stuff to do in life. My husband is brain injured, so sometimes it is challenging to come up with things we can all enjoy. Sitting outside watching the kids play is our favorite thing right now. Southern CA allows outside time year round. Just the weather alone makes us feel soooo blessed. Yes, my husband is injured but he is moving forward in his recovery each day. We actually feel fortunate. He was a paramedic I am a Trauma nurse. We know first hand how much worse off we could be.

We claimed bankruptcy and are now facing possible foreclosure. Me and my husband talked for a long time. We decided that we are acutally very o.k. with our new reality. We are accepting it well. What was EXCRUTIATING was when we had to tell both our parents that we claimed BK and are going through foreclosure. As far as we can tell nobody in our family has gone BK, foreclosed or even paid a bill late. both our parents live in their original house. We thought we would get comments like: Why did you upgrade to such a huge house? how come you don't have more savings?

Guess what, all of our family is behind us 100%. I wish that their opinions did not matter so much to us. We stressed about it way to long.

Since, I have spoken to others (at work and such). I found out that so many people are accepting the "new reality" for themselves. But, most people (like us) feel shame and don't want certain people in their lives to know.

I am sharing this long story in hope that if someone out their is mostly stressed out because of what people may think, try talking to those that you dread finding out. They might surprise you with their endless support. Don't lose sleep like we did. Your health may suffer from the negative feelings.

I am embarresed to say, our family finding out about our BK and possible foreclosure brought me more stress then my husbands horrible injury. My priority should have been our health and kids only.

It is nice not to stress anymore. The banks can modify -or- we can go. I really don't care anymore. Either benefits us. I don't fell defeated anymore, I am finally free and no longer scared.

Good luck everyone. God bless. You are all in my prayers.

[RimToRimHiker]

Long ago someone told me that if a dozen people were sitting around a table and each threw in a card listing their particular challenges at the moment, chances are everyone would take their own card back, because their is always some who has more challenges. So true. So true.

Medic: You and your family are in my thoughts. Glad one less stress has been lifted from your shoulders.

We've told several friends and a couple of close relatives. Majority have been supportive especially those who are having financial troubles of their own. I won't tell my mother. She's 86. Very set in her ways. In her mind nobody should even buy a house unless they can pay cash. Definitely not throughly in touch with reality. Her and I have never been able to talk about finances among other things. I accepted that long ago. When the time comes to move, to avoid hours of lecturing, I will simply tell her we are moving and give no details. Sorry it has to be like that but so be it.

We stressed, or I should say I stressed... my husband was ready months ago, over the decision to stop paying and walkaway. Some it was because I do like our house, neighborhood, etc., some it was the drop in my almighty FICO score but a lot of the stress was over wondering "what would people think". Since making the decision I have slept better than I have in months. Not sleeping is definitely not good for one's health. I no longer care about what others will think, about my FICO score or even about the house because it's just a house..we'll find another. What matters is that my husband and I are doing what's best for us.

[markmc2000]

Glad to hear your stress has been relieved medic and that you are happy.

Couple of thoughts based on what I have read in these posts lately. People are funny creatures, they may give you a hard time about your decision and one may feel peer pressure to make a decision based on that pressure. OR, maybe he is just giving you a hard time out of envy that you are making a decision he couldn't make!


Remember, people forgive and forget! In a year or two that person who was critical may not even remember you walked away from your home! He has problems and may be worrying about paying on an underwater house at that point!

Another point. I was trying to convince a friend to walk away from his house. He has such high morals he can't get over the fact that it is not right to put money in your mattress and not pay a mortage. He said, "what happens if you go to court and ask do you have any money in hiding?" I reponded, " you tell the truth". He stopped in his tracks. My argument is that you are in a contract and the bank can choose to eceercise its rights under the law. But, I can negotiate along the way and force them to try and squeeze it out of me. I am ok with the consequences, and will live with those consequences.

[RimToRimHiker]

I'm down 2 payments, had my 1st real conversation with lender yesterday. The very kind lady, who was obviously working from a call center 1/2 way around the world (if the accent wasn't a give away, the way she kept addressing me every couple sentences as....my first name preceded by Miss, that was) asked me several basic questions, are you living in the house, what is your home phone #, etc., etc. She then asked if I had a savings account and if so how much was in it. I declined to answer. She said to send the loan mod pkg back with all our financial info. I told her I would not be doing that and told her to have a nice day. My husband's savings account is our "mattress" at the moment. Loans are in my name only. If the loans were in both of our names our mattress would definitely be our savings account.

I'm sure a couple of our neighbors will go all high and mighty on us when they find out we're walking. Oh well, they'll get over it and if they don't... another oh well... That's my new credo to live by.

[Irish Gal]

What happened to the good ole days when people just minded their own business? Your personal business is just that. The only people who should have ANY opinions about your financial affairs are the people who are paying your bills ! If they're not paying your mortgage - they don't get to comment or look down on anyone ! Period ! How 'bout that ! I've shared with only a few people in my life (fam and friends) who have my back in life, no matter what. Everyone else - none of their business. I don't feel in the LEAST irresponsible about any decisions I make in this mess as I was steered into a predatory loan to begin with, when I qualified for a prime one (first time homeowner). I genuinely had no clue the financial world was sooo corrupt . So, the fancy loan sharks can now take back their bloated mortgages and eat their 50% loss (and growing daily) . They don't want to fairly negotiate. Nothing you can do then. Game's over.

"What you think of me is none of my business!"

[sharona]

I spoke with my sister today. Big Mistake! She has the mindset that the homeowner needs to take responsibility for their actions, 'afterall they signed the loan docs" She made me feel horrible!
The worst part is I felt so horrible all day I forgot to take my mortgage payments off automatic payment and inadvertenly paid my mortgage today

Sharona

[Irish Gal]

<< The worst part is I felt so horrible all day I forgot to take my mortgage payments off automatic payment and inadvertenly paid my mortgage today>>>

Sharona,

I felt for you when I read this. All I can say is, as this process is sssoooooo emotionally draining and really kicks one's arse, it's important to be self-protective and take care of oneself emotionally throughout this process. Distressed homeowners are being beaten up by just about everyone these days . So, stop beating yourself up gyrl !!!!! Otherwise, one may cause oneself more and more (unnecessary) stress, which leads to all those horrible stress related ailments (migrains, substance abuse, weight gain, high blood pressure, sleep disorders, high anxiety, mood disorders, etc.). For me, taking care of myself means not setting myself up to get beaten up by others who have NO CLUE about this housing mess and this quality of life-killing process. Some folks will NEVER get it. Why put yourself in the way of their bullets ? And, then have to waste a day emotionally recovering from their bullet? Family members' words can hurt the most, sometimes due to our deep need for their love and approval. But, they can't hurt you unless you give them the power to . I urge you to be more self protective throughout this process. You don't need to be ****er punched by others during this process by those who will never understand your situation. Please note my intention is to support you, not give advice or lecture. More like a sister . Don't waste another minute beating yourself up. Pick up your bootstraps and do something nice (and free ) for yourself today (or soon). Hang tough sister. We've got your back here !

[sharona]

Thanks for the words of encouragement Irish Gal!
I feel better today and know I am making the right decision. the worst part is I inadvertly paid the mortgage yesterday through my automatic payments

[nana8]

Sharona-
Hang in there, we are all right here with you! There are people who will never understand what this is like and how we feel, and I hope they never have to. Just know that it is much easier to judge from the ouside looking in......you have to do what is right for you and no one else. Be strong.....you are not alone

[ProfessorShays]

Sharona stated, " spoke with my sister today. Big Mistake! She has the mindset that the homeowner needs to take responsibility for their actions, 'afterall they signed the loan docs" She made me feel horrible!"

I agree with your sister insofar as she suggests that you act in a responsible manner. Where I'm sure she and I disagree is what that term "responsible" means. I would suggest that it means adopt an approach to your situation that moves the decision making process away from emotions and towards a process designed to make an effective and informed decision based upon circumstances.

Through education and training I can tell you that I understand each and every provision of the two inches of documentation you were requested to sign when you obtained your secured real estate loan. Problem is, I'm the exception rather than the rule. The person who went through those forms with you and assisted in their signing undoubtedly lacked sufficient expertise to explain them to you. I'm willing to bet the loan officer you worked with who likely took advantage of you, didn't have an understanding of how the loan worked.

Your obligation is to make a responsible decision. My sense is you are doing so.

Take care,

Daniel

[ORNV3]

I've found that my "mindset" has changed during this whole process. One of my best friends called me yesterday to tell me that her and her new husband are going to start looking at buying a home. She was really excited about it and I found my self almost jumping through the phone and yelling "NO! Don't do it!" I'm usually a really supportive person... I'm sure that's why she called me.

Anyway... I calmed down and just told her to make sure they can comfortably afford it without sacrificing their lifestyle. I told her I don't think the market is at the bottom yet and asked her if they had a down payment. They don't have anything saved for a down and payment and they have a really hard time saving money. I don't know... I don't think they should do it yet, but I think I've become jaded.

[sharona]

Thank you for the words of encouragement Nana8. I appreciate them. My brother has been very supportive through all of this. He thinks more financialy and agrees I should walk away.

Professor Shays thank you for responding. As always I feel much better after I read your posts. I was thinking of emailing your response to her. She works for a forclosure lawyer outside of Philadelphia so I would of thought she would have more compassion.

Take care,

Sharona

[AZChick]

I was at the playground the other day with my kids, and the topic came up about how much money people had lost on their homes....I grew very quiet of course....one mother who had taken over 100K loss, said "she could never walk a way, that's just wrong", I guess they'd think I was a criminal then, she went on to say "we're going to hang on till things get better", I was still quiet and just smiled and thanked God for the wisdom he has given me..................PLEASE, hang on to what???

[Jumbo101]

AZChick that must of been a weird conversation. I understand both sides. I think we also have to remember how people were raised. At least for me I was always told you pay your bills no matter what. We are in such a weird position with the current market. I think people are missing the reality sometimes and speak like their parents did. They know they should walk away too but they cannot disconnect from how they were raised.

[cdmosaic]

To me if people choose to stay even underwater and wait, more power to them. I don't judge that choice and I don't want to be judged for mine to walk away; to each his own. I just suspect that sooner or later those people waiting will end up doing what we are doing too.

We are looking at rentals now and saw a nice one yesterday which is at the upper most price range we are comfortable with. Nice owners who moved to be closer to work and have been renting the place out the past year or so. I went home and checked out the place on zillow.com. Turns out this nice couple is way upside down on this investment and unless they put a huge amount down on the house when they bought (in excess of 40%) the rent they are charging does not cover the mortgage, taxes and insurance by a long shot. No way would I feel comfortable renting from them. Don’t want to be going through this in another few months on the receiving end. I feel bad for them and was really tempted to call and ask why they are trying so hard to keep the place. I know why, but they must be coming up with $1,000 or more a month in addition to the rent. Of course, I have no idea what their situation is, but I prefer to do my research before renting a place. No desire to go from the frying pan into the fire.

[AZChick]

cdmosaic, very wise considering these days...no telling when you are renting if the owner may walk... I've heard stories of people renting out homes with the full intention of foreclosing just to get the rent money......jumbo101, yes it was a very weird conversation...I took it with a grain of salt, all of us have our breaking points....for me it just didn't make sense anymore, considering I had cut all excessive spending from my budget and still was struggling to try and save on a monthly basis. With the current savings rate in this country how are any of us going to be able to retire with anything saved....no one's pension is assured anymore....we have to make cuts where we can, including in housing....

[KT in CA]

So far everyone I have talked to about the situation has been very understanding. And also, they seem to know about 3 additional people who are in the same predicament as we are. Scary.

Luckily for us we found a great home where there is no danger of foreclosure. But in talking with a property management company, they said there is really no way for them to guarantee it's a safe home. There is no database they can go to, and even the online property tax records don't do any good since so many of those are paid from escrow and could have been paid before foreclosure started. He said sometimes they can get a feeling by how quickly they want the home rented and if they are wishy-washy about funds they have reserved to do repairs as necessary. So property management companies are in a tough spot too. As he told me, "We aren't the mortgage police."

[sharona]

Hey everybody,

I was just with my tax accoutant today. He told me to walk away from my condo. He said not to worry about what other people think or say that they aren't paying my bills and to consider my financial future.
He also suggested doing a bk to start with a clean slate. He feels if you are already going to have bad credit why not erase all your debt and start over. He feels the banks are getting bailed out and we are paying for it so why not do a bk. I must admit I am starting to think about it even though last week I would have never considered it...

Sharona

[Enough Already]

I would never have considered walking away before all of this. It was still out of the question for me as recently as November. We've know for a long time we could not keep it up, but when we really faced the facts it was the only smart move we could make. My husband and I would like to retire one day. We sure wouldn't be able to do that by hanging on to this big losing investment.

[sharona]

I agree Enough Already. I was raised to always pay your bills no matter what. This has been a very hard decision for me and I still struggle with it. I know I am doing the right thing financially by walking. What I am having a hard time with is... morally am I doing the right thing?

Sharona

[Enough Already]

Sharona,

I completely understand. I struggle with it too. I was even feeling bad for the bank (crazy, I know). But, not paying totally goes against the grain for me. Before making this decision I've never been late on a payment and I've never not paid a bill - ever.

In this case though, it's the right thing for us to do. We have to live with our decisions, and I do know that bailing ourselves out of this mess is the best thing we can do for our family.

Quality of life is so important. We do not want to spend the next 26 years being slaves to the mortgage. So, even though I get cold feet sometimes, and I worry about all the "what ifs" and possible consequences, I know it's the right thing for us to do.

Plus, I can come to Loan Safe and read posts from others in my situation, and I feel better.

[dogatemy]

What I am having a hard time with is... morally am I doing the right thing?

I firmly believe the banks caused this problem. They are perpetuating this problem. They are refusing to solve the problem. There is no reason any homeowner should feel morally obligated to fix this problem.

[Enough Already]

I agree with dogatemy!! We should not feel morally obligated to fix it. We've all made mistakes. If one is able to fix the mistakes they've made it should be done. No one is bailing us out. We have to do what we have to do to bail ourselves out of this mess.

[RimToRimHiker]

You said it dogatemy!!

CDMosaic: These are definitely some strange times when renters need to research potential landlords. My attorney advised me to do some online detective work before we sign a lease. He strongly recommended we only consider houses that were bought before the big run-up and ones that are not mortgaged to hilt.

[Enough Already]

Good advice from you attorney, Rim to Rim. It would be awful to get all moved into a new rental only to find out you've got to move out in 3 months due to pending foreclosure, and you've lost your security deposit etc.

[civilguy]

My buddy has has a duplex that is about 200k underwater. He is living w/ his 6 member family in a 2 bdrm duplex in the ghetto paying almost 3k a month and that includes money from renting the front unit. I tell him it's ridiculous that his family is paying 3k to live in the same place where his tenants are only paying 900 bucks. For 3k he could rent a 2500 sq ft house in a nice area. His family is deathly scared of the credit consequences of foreclosing on the house. They have the mindset of credit being the most important thing in there lives.

[dogatemy]

They have the mindset of credit being the most important thing in there lives.

That is so sad. It is hard to contend with that kind of mentality. I have friends that make over $100k/year who sit around and brag about their FICO scores. Ironically these are usually the same people that work 60-70 hours/week, live in houses that will literally never get paid off and can't afford to take a vacation because they are 'owned' by their employers. I hope your friend realizes he is destroying only himself. Your FICO score can only help you dig further into debt. It can't help you get out.

[Feelingtrapped]

All posts very well put.

After obsessing over my similar issues for over a year and studying almost every situation posted on Loansafe. The walk away decision has just become a no-brainer. Again....it took a year to become completely comfortable with the realities of our new world, lost home, lost credit score(who cares) etc.

We have scouted rentals for several months and found almost anything we want is available so we are taking our time enjoying the rent free period, playing the modification game (Yawn!) with the lender and planning our escape etc.

Just today I had the water heater in my home spring a leak and as I headed out to Lowe's to buy a replacement, the garage door malfunctioned, broke both springs and burned out the motor. So today I was set back over $1600.00 in repairs in just one morning.

I couldn't help but think If I were a renter none of this would be my problem! Looking forward to moving on!

FT

[Irish Gal]

<<< Your FICO score can only help you dig further into debt. It can't help you get out. >>>

Love the pearls of wisdom. The whole credit game is just that. Rigged anyways by creditors. When I had a great FICO score (6-9 mos ago) and was trying desperately to get my first (CW) modification, and kept stressing I wanted a rate reduction fair to my score, they said "Oh, we don't use FICO scores in determing mod rates / terms." I was making decent $ then so they (like they still do) make most mod decisions based on how much one earns (if you earn more, they gouge you more - it doesn't matter what your score or payment history is/was). Then by 2nd negotiation, the ole FICO began tanking, due to late pmts. They THEN changed the mod game rules by then saying they WERE using FICOs re new rates / terms. So, it's all one, big, fat, lucrative, creditor game, rigged against the consumer, as usual. They can and do change the mod rules any time they want. F___k FICO and the FICO puppet masters . And Suze Orman who tells desperate callers to not date anyone with a bad FICO score .

[KT in CA]

AIG hands out bonuses and doesn't blink an eye. I absolutely refuse to feel bad about giving myself one by walking away from my albatross of a mortgage.

[civilguy]

[QUOTE=Irish Gal;71879]<<>>

I think Suze Orman is getting kickbacks from the FICO people lol. The Credit bureaus should get some blame in this whole mess just like the rating agencies that pegged all those toxic CDO's Triple A. Just because someone has a 800 FICO score doesn't mean you should give that person a 500k loan.

[RimToRimHiker]

So that's how ole Suze made her money.

Maybe all those damn Free Credit Report ads on TV and the pop-ups on the internet asking if you know your credit score, have subliminal messages that are designed to make the viewers feel guilty as hell for not having an 800 gazillion credit score.....or maybe worse...played slow the hidden message is: you will pay on your underwater house no matter what or you are scum. Geez that would explain my panic attacks in the middle of the night when I used to dream my credit score was 152.

Now I really don't care if my credit score gets down into the double digits. I've come to realize a credit score, like age, is just a number.

[Irish Gal]

So that's how ole Suze made her money.

Maybe all those damn Free Credit Report ads on TV and the pop-ups on the internet asking if you know your credit score, have subliminal messages that are designed to make the viewers feel guilty as hell for not having an 800 gazillion credit score.....or maybe worse...played slow the hidden message is: you will pay on your underwater house no matter what or you are scum. Geez that would explain my panic attacks in the middle of the night when I used to dream my credit score was 152.

Now I really don't care if my credit score gets down into the double digits. I've come to realize a credit score, like age, is just a number.

Too funny !!!! Well, dirt rich Suze partners w/ FICO as she sells her "kits" on FICO. Her flirty old "hey bbooooyyyyffffrrrriiieeennndddd ! " routine annoys the hell out of me And her faux stern mother routine. Her advise is wrong half the time on this housing mess and what she tells people to do. But, I like her style, hair and her super bright teeth and perrenial tan .

[civilguy]

So that's how ole Suze made her money.

Maybe all those damn Free Credit Report ads on TV and the pop-ups on the internet asking if you know your credit score, have subliminal messages that are designed to make the viewers feel guilty as hell for not having an 800 gazillion credit score.....or maybe worse...played slow the hidden message is: you will pay on your underwater house no matter what or you are scum. Geez that would explain my panic attacks in the middle of the night when I used to dream my credit score was 152.

Now I really don't care if my credit score gets down into the double digits. I've come to realize a credit score, like age, is just a number.

Those free credit report ads are hilarious!! From what I can tell if you have screwed up credit you will be A: living in your moms basement B: Drive a jacked up econo box C: working in a seafood restuarant. It's all brainwashing to keep the public in debt servitude!!